Archive for the ‘Small Group Insurance’ Category

A lot of people who get their health insurance from their large group employers might just be searching for insurance coverage elsewhere soon. While it certainly wasn’t the intention of the Affordable Care Act to make it more difficult for employers to offer insurance to their employees, that has been an effect of the health insurance mandate often referred to as Obamacare. In the Forbes article, “Obamacare Increases Large Employers’ Health Costs“, Sally Pipes tells us about recent study findings. S&P Captial IQ’s study determined that 90% of workers in America who currently have health insurance through a large employer will be searching for a policy in the government exchanges by 2020. That figure seems extreme, but the harsh reality is that the taxes, fees, and added insurance mandates placed on large employers are hurting them. Many of these employers simply don’t think that they can afford to offer health insurance if something doesn’t change. They are currently mandated to offer you health insurance plans, so that is something that will have to be considered as well.

Group health plan sponsors pay a new fee to help fund the government sponsored Patient Centered Outcomes Research Institute (PCORI). This organization tests the effectiveness of certain medical treatments and Medicare uses the results to determine what they will cover for their patients. Some skeptics worry that results could be twisted to support lower cost treatments over more effective, but higher cost ones. Another fee that large employers have to pay is a Temporary Reinsurance Fee. This fee is supposed to stabilize premiums in the individual health insurance marketplace. The American Health Policy Institute estimates that $15.3 million will be collected by this fee in just two years. In 2018, large employers will start paying a 40% excise tax on health insurance plans that are deemed “expensive”. Individual premiums above $10,200 and family premiums above $27,500 are considered “expensive”. One company estimates that this excise tax will cost them $378 million over the course of five years.

In addition to the direct taxes, there are indirect tax increases for employers as well. There is the mandate for companies to offer health insurance to full time workers within the next year or two. If they don’t, they will pay a fine. Companies also have to allow children to remain on their parents’ health insurance until the age of 26 now. That last mandate alone has increased employer insurance costs between 1 and 3%. Mandating full coverage of preventative care services, such as immunization and birth control is drastically increasing employer health care costs as well. The AHPI survey estimates large employer health care costs to rise by 4.3% in 2016, by 5.1% in 2018, and increase by 8.4% in 2023. This equates to hundreds of billions of dollars extra that large employers will have to shell out over the next decade or so.

Unfortunately, what this means to Americans with health insurance from their large employer is that their costs will likely increase as well. More than 80% of large employers have already increased their employees’ deductibles, or plan to do so soon. Some employers might stop offering health insurance altogether and pay the fine for not offering plans. They might actually save money by doing that, although employee morale could decrease from such a move. Companies may also offer incentives for sick employees to search for health insurance in the exchanges instead of using the company plan, saving both the employer and employee money. But if all of the sickest employees head into the health insurance exchanges, costs within those will increase for everyone. The potential destruction of employer health insurance plans was certainly not a goal of the Affordable Care Act, but it might just be a consequence. If you are worried about losing your employer health insurance, you can compare health plans and rates here.

Do you have health insurance coverage through your small business employer? Are you a small business that offers health insurance to its employees? If so, your premiums may be increasing because of the Affordable Care Act. ABC 17 News’ Parija Kaviland posted an article saying that the “ACA will raise premiums for 65% of small firms.” The main reason for this change is that small business health insurance premiums were figured based on employees’ health status and gender. So groups filled with women of child bearing age would pay more than groups filled with young, healthy men. Under the new law though, pricing for small group health insurance can no longer be based on health status, gender, or how often the health insurance is used. This levels the playing field for businesses that employed older or less healthy workers, but also will raise the costs for those small businesses who had healthy workers that didn’t use many health insurance services.

Overall, the Centers for Medicare and Medicaid Services estimates that 11 million people will see increasing costs as part of that 65% of small firms. This does mean that 35% of small businesses will likely see premium decreases, however. Many of the lower premiums will be offered because those particular small businesses employed older and sicker individuals on average. The younger, healthier workers will not be able to take advantage of lower premiums anymore. But the CMS report noted that small businesses are eligible for tax credits just like individuals are under the Affordable Care Act. Credits are based on how many people are employed, their average salaries, and how much they contribute to their insurance plans. Tax credits will help some small businesses counter the effect of increasing premiums.

The CMS report did not estimate how much premiums would increase for the 11 million people expected to see their payments go up. They also didn’t say how much payments might go down for the other 6 million people enrolled in a small group health insurance plan. The only certain thing is that no one will be able to take advantage of offering lower than average premiums because they have young and healthy workers anymore. One downside of that was that even if one person got seriously ill, rates could increase dramatically for everyone in the plan. This new system seeks to make premium costs fair across the board. They shouldn’t be as affected by one illness or a few women getting pregnant and incurring high health care costs. Some plans have been grandfathered in and will not be affected by these changes just yet. If you are looking to compare health insurance in an individual or small group plan, we’d be happy to help you receive quotes from multiple insurance companies.

There is good news for people with individual and small group health insurance plans Illinois. Many of the more than 185,000 people who received cancellation notices from their insurance company will have a year long reprieve from finding new coverage. After an outcry from Americans, President Obama has urged state insurance regulators to make exceptions to the Affordable Care Act requirements. Many existing health insurance plans do not meet all of the requirements, causing hundreds of thousands of people to get a cancellation notice. If your insurance plan was effective prior to October 1 of this year, you will now have until October 1 of 2014 to select a new insurance plan. This is great news to Americans who were scrambling to make health care plan decisions by January 1. WGN’s Peter Frost discussed the details for Illinois residents in the story “Illinois to let companies sell existing health insurance plans.”

Blue Cross and Blue Shield of Illinois, the largest insurance company in the state, said that they will be contacting people who received cancellation notices to tell them their new options. More than 475,000 people in Illinois had individual health insurance policies as of data collected in 2012. Some of the people whose plans do not meet Affordable Care Act requirements will receive federal tax credits to help pay for new insurance plans. But many others are upset because their new plan options cost double what their prior health insurance plans cost. So far, 15 states have told their insurers that it’s okay to extend current insurance plans for another year. Some states are not allowing this plan extension though, despite the President’s request for them to do so. Some insurance companies worry that extending old plans will keep too many people out of the health insurance exchanges, which could raise those plan costs. Those people who are buying plans in the health insurance exchanges have until December 23 of this year to purchase a plan that will go into effect January 1.

I don’t think this comes as a surprise to anyone, but research confirms that health care costs are growing faster than wages. The Kaiser Family Foundation and the Health Research & Education Trust found that employees pay 6% more for their health insurance than last year, which is three times higher than their increase in wages. And that’s just the average. I’m sure there are many people paying an even greater amount for their health insurance, not to mention those whose wages haven’t been increasing at all. This is not to say that companies are being unfair however, because they are paying quite a lot more to cover their employees’ health care as well. Compared to one decade ago, family health insurance premiums have increased by 89%. Workers are paying $4,565 each year for their employer-sponsored health insurance, while individuals are paying around $1,000. This information comes from CNN Money’s Tami Luhby in the article “Health insurance premiums rise faster than wages.”

Those amounts though are little in comparison to what the employers are paying. Families are covering 28% of the total health care cost and individuals are paying only 17% of the cost. The increase in total health care costs was around 4%, taking into account both the family or individual and employer share. But overall wages only increased by 1.8% on average, so the health care increases take a bigger bite out of paychecks. This study has been conducted yearly since 1999 and this year actually saw the second smallest increase in health care costs. A slower economy is the biggest reason, but that is good news for employers and employees alike. Employers have been trying to put more of their costs onto employees for awhile now though. The amount of yearly deductibles as well as the number of companies making employees pay a deductible has been steadily increasing.

Something else that has become popular is offering wellness programs or discounts for employees who take steps to remain healthy. More large companies implement these types of plans, but small companies do as well. Companies with 50 or more workers will be required to offer health insurance plans starting next year. But 93% of these companies are already offering health insurance to their employees. When it comes to small employers, just over half of them are offering health insurance plans to workers. Families at small companies pay a lot more than those at large companies for their health insurance, but the individuals at small companies actually pay less. Individual health insurance exchanges popping up under the new health care law shouldn’t do much to change employer health insurance, unless the policies become more affordable to workers than remaining in their employer sponsored plans.

There have been health insurance exchanges in California for decades, something that much of the country is just starting to understand now. Since 1996, CaliforniaChoice has been operating a private health insurance exchange in California. They are the most successful small group private insurance exchange, serving 150,000 individuals and more than 10,000 employers in the state. This information comes from CaliforniaChoice’s press release “CaliforniaChoice Welcomes Covered California Into the Health Insurance Exchanges Market.” In addition to their other members, Covered California has now joined this private health insurance exchange. This is good news for California residents looking for health insurance because more competition, be it in private or public health insurance exchanges, benefits the general public.

CaliforniaChoice has many things to offer in addition to health insurance. They provide dental, vision, life insurance, and chiropractic care options. For no cost, they also give added value in the form of employee discounts and online human resources support. Some of the providers in CaliforniaChoice’s exchange include Health Net, Aetna, Kaiser Permanante, Anthem Blue Cross, Sharp Health Plan, and Western Health Advantage. Covered California includes options from some of these insurers as well as others. They also just announced last week the carriers that are going to be part of their new Small Business Health Options Program (SHOP) marketplace.

The success of both public and private health insurance exchanges lies in a combination of great choices for consumers and excellent customer service availability. In addition to that, qualified brokers are the cornerstone of CaliforniaChoice for their expertise and unbiased information. Their plans are only sold through brokers. Small businesses aren’t currently penalized for not offering health insurance or forced to join Covered California’s SHOP program, but rules are changing for some employers when the full Affordable Care Act takes effect. But as attention to health insurance and exchanges in particular increases across the United States, CaliforniaChoice hopes that more employers will realize that they can offer affordable health insurance to their employees and increase quality of life.

Changes to health insurance plans have already started and the bulk of changes are still looming in the near future. With rising costs and unhappy Americans, some employers are taking creative approaches to dealing with increasing health plan costs. In “Your health plan: the next frontier,” Money’s Amanda Gengler tells us what we can likely expect with the future of health insurance plans. One small company owner in Missouri made big changes when he saw skyrocketing health care costs and an increasing number of sick days being used. He made healthy changes to the vending machines, opened a fitness center, gave free on-site check-ups, and gave big financial incentives in the form of lower deductibles and no premiums for workers who took steps to be healthy. A big portion of increasing health care costs has been passed onto employees through higher deductibles, premiums, and co-pays. But making healthier choices to avoid needing so much medical care is a newer way to try and save money. It certainly benefits employees in more ways than one.

Prices vary widely from doctor to doctor, especially if you choose one that is out of network. New plans will likely streamline your choice of doctors even more and staying in that smaller group could save you big on your premiums. Insurers and employers save money if you don’t visit top shelf doctors who order more tests than average. Estimates show that around 1/3 of big companies will have this type of streamlined plan by next year. This plan might even force you to pay the entire cost of seeing an out of network doctor. If this type of plan becomes an option to you, research what doctors and hospitals you will lose out on and see if you are happy with the replacements available. Florida Blue says that local big-names and academic med centers aren’t usually included in these streamlined plans though.

Many companies will have you choosing your own health plan from a list they have chosen in the future. They may pay a percentage of your plan costs or a fixed dollar amount, and the plans may even be in the private exchanges. Plan to spend a lot more time researching plans and options and maybe even switching to a high-deductible plan to save money. Since you will be paying a bigger percentage of your bills, employers are hoping that you will make more cost-efficient health decisions and stay healthier overall. A healthier America may just be what it takes to lessen the increase or even decrease health care costs overall. Expect a lot more health initiatives from your employer that could lower parts of your plan costs or offer you rewards, even cash. But on the flip side, you might get charged more for a high BMI or high cholesterol, especially if you aren’t doing anything to change it. The Money article has some great examples and personal stories of how health plans have changed and will continue along that road in the future.

The Affordable Care Act stipulates that health insurance companies have to follow what’s known as the 80/20 rule. This Medical Loss Rule helps to assure that health insurance companies operate more efficiently by spending at least 80 cents of every premium dollar on patient health care or quality improvement. If they don’t spend according to the rule, insurers have to send rebates to the customers paying those premiums. According to the Missouri News Tribune’s Olivia Ingle, “Health insurance rebates (are) on the way” for Missouri residents. The average family in Missouri will get a rebate of $173. This will affect 600,000 Missouri residents, who will be paid $60.5 million this year. Last year, $1 billion was owed to U.S. residents through this health insurance program, compared with a total of around $500 million owed this year. The Department of Health and Human Services says that 8.5 million Americans will get part of that $500 million owed in rebates.

For consumers with individual health insurance, they will be notified by their insurance company if they are owed a rebate. It can be sent to them as a check, it can be reimbursed through the account used to pay the insurance premium, or it can be applied as a credit for future premium payments. Companies have until August 1 to issue the rebate regardless of the way it is issued. For employer health insurance rebates, companies can use one of the three ways mentioned above or offer more generous benefits to their employees in exchange for the rebate amount. Golden Rule Health Insurance owed the most in Missouri’s individual market with almost $2.5 million owed. Healthy Alliance Life Insurance Company owes close to $4.2 million, the most in the small group insurance market. In the large group market, UnitedHealthcare Insurance Company took the top spot for rebates owed with $3.6 million. Missouri residents owed a rebate look forward to receiving their money this summer, regardless of the amount.

Throughout the United States, individuals, companies, and health insurers are trying to find ways to lower health insurance costs and keep Americans healthier. There is a new innovative company focusing on small employers and their workers that is looking to change the way health care works. According to Med City News’ Veronica Combs, “Maxwell Health offers complete insurance experience from broker to concierge to coach.” Maxwell Health’s CEO and co-founder, Veer Gidwaney, says that the company is focused on the entire realm of health care. They aren’t looking to just sell you health insurance and then forget about you. Their care goes from the sale to finding health care providers and keeping members healthy. Customers calling in with questions about making claims or which providers to use will speak with same person who helped them purchase their insurance to simplify the process.

Maxwell Health started launching programs in March and is currently operating in seven cities. Their focus is on small employers with 70 or fewer workers and helping them offer these benefits to their employees. They want companies who realize the benefits of insurance programs and wellness programs, those who see this as a great investment in their own company’s future. With insurance brokers, technology associates, and designers working on their team, Maxwell Health looks to cover all facets of health care for their customers. By running a private exchange, they give employers detailed plans to run their insurance program. Maxwell helps with claims, recommends doctors, helps with prescription drugs, and is working on maintaining an on-call nurse.

Daily Feats is the first extra program that they have introduced. This program uses social networks to help encourage healthy behaviors through the web. Maxwell’s overall concierge service can help you find out where to get the least expensive medical tests and keep you healthy so that you avoid hospital stays and help save money for everyone. One of their clients offers rewards for employees who get fit; they can receive gift cards based on how many points they earn. This particular company says that they can offer more benefits to their employees at a lower cost. By offering concierge service, insurance, and wellness programs, Maxwell Health has a unique service to offer small employers that they believe will catch on and help lower overall health insurance costs.

There are a lot of Americans who should be helped when it comes to the new health care laws taking effect in 2014. People with pre-existing conditions will have to be offered coverage from health insurance companies or will be able to find it in state run exchanges. Older Americans who have often been charged up to five times the amount for their coverage as their younger counterparts cannot be charged more than three times more now. And many Americans who simply didn’t think they could afford health insurance will likely be able to find better health quotes and be helped with government subsidies after the full law goes into effect. But the youngest, healthiest Americans could possibly be hurt the most as their health insurance rises to make up for all of the others. This information comes from N.C. Aizenman of The Washington Post’s article, “Young Adults Face Health Insurance Rate Scare.”

Insurance companies are worried that they will face a lot of criticism when rates rise, so they are trying to prepare by warning consumers about the “rate shock” that is to come. They blame this on the fact that they will have to offer customers more comprehensive coverage, they have to offer plans to people who are already sick (ie have pre-existing conditions,) and they can’t charge the elderly sky high rates anymore. While supporters of the law do understand this, they argue that using the term “rate shock” is just a scare tactic and point out the fact that government subsidies will help pay for part of people’s health insurance increases. A lot of healthy people in their 20s purposefully have plans with less coverage, but will now be forced into carrying more comprehensive plans that will cost them more, whether they like it or not. Rates are not likely to double for those with employer sponsored health plans, but individual and small group coverage rates could jump anywhere from 10% to more than 50%.